In Midwest, property taxes climb despite increased state aid

ST. PAUL, Minn. – Minnesota legislators boosted the local government aid program for cities by $80 million in 2013 and sold it as a slam dunk toward lowering property tax levies.

“I would expect we’ll see local government officials … delighted to take the additional resources that the state provides and use that to reduce the property tax burden, because they hear about it just as much as we do here,” Democratic Gov. Mark Dayton said at a July 2013 news conference.

The state’s top revenue official sounded a more cautious note on the likelihood of state aid buying down the tax levies.

“We’ll see how they do it,” said Myron Frans, commissioner of the Minnesota Department of Revenue at the same media event. “It’s up to the local officials. It’s their job to set local levies and the amounts.”

The windfall resurrected the debate over whether local government aid pays down property tax levies or amounts to a down payment on future local levy hikes, which, in turn, pay for increased government spending fueled by the state payments.